The different alternatives that the financial sector presents with a view to creating new financial products to support the business sector, as well as proposals for insurance mechanisms to protect against various risks that impact economic activity, were under discussion on the first day of the 17th Annual Conference of the Private Sector (CASP).
For Salim Valá, chairman of the Mozambique Stock Exchange (BVM), the overall context is one of “insufficient knowledge of the various existing financial mechanisms,” stating that the country still faces “the great challenge in the dissemination of financial instruments.
“In the case of the Mozambique Stock Exchange, the mechanisms that exist today, whether through the financial instruments available, such as shares, bonds, and commercial paper, are mechanisms and instruments that despite being available and existing in the market for some years now, are still not very well known by all entrepreneurs, investors and economic agents. So this is a challenge that we have been facing, which is the dissemination of information and awareness of the main economic agents”, he said in his speech.
Speaking as one of the main speakers in the debate on “Financial Solutions for the Recovery of the Business Sector and the Creation of Resilience”, Salim Valá revealed that “recently his institution brought new services to the market, such as the statistical data panel and the BVM mobile app, means that use technology precisely to reach a greater number of people”, he added.
“At the moment we have several products in the pipeline that we are testing and as is well known, they are preceded by careful studies and analysis, taking into account that some of these instruments will require the recalibration of regulations, in the aspects of technological alignment that will be used in the country through BVM,” he explained.
Regarding the creation of economic resilience, the president of BVM was clear in stressing that it is “intended to introduce the certification of deposits that can be vital for agricultural marketing,” ensuring for this “we are working with companies and strategic partners.”
“In the $3.5 billion that the stock exchange financed, 80% who went to finance themselves was the state and the businessmen went to get 20%,” he revealed
However, in order to change this scenario, Salim Valá said that in order to be able to be financed, entrepreneurs must start by presenting good economic and financial health of the companies, audited accounts, organisation and shareholder dispersion.
Currently the market capitalisation of the BVM is 19.32 percent of GDP in Mozambique, while in 2019 it was 15 percent. “We now have 11 listed companies, when until March 2017 there were four listed companies. We have medium-term projections of moving from the current level to a situation of 35%, with more than 25 companies by 2026. This is a job that will be done in conjunction with all the other partners in the financial sector and the national economy,” he concluded.